Benchmarks finished in positive territory on Tuesday with the tech-heavy Nasdaq closing above the 7,000 level for the first time. Optimism over strong market performance in 2018 contributed to these gains. All the three key U.S. indexes posted magnificent gains in 2017 and maintained the momentum on the very first trading day of this year. Both the S&P 500 and Nasdaq reached their intraday high levels and closed at their best settlements ever. Markets were closed on Monday owing to the New Year Holiday.

How the Benchmarks Fared?

The Dow Jones Industrial Average (DJI) increased 0.4%, or 104.42 points to close at 24,824.01. The S&P 500 rose 0.8% to close at 2,695.79. The tech-laden Nasdaq Composite Index closed at 7,006.90, gaining 0.8%. The fear-gauge CBOE Volatility Index (VIX) decreased 11.5% to close at 9.77. A total of around 6.7 billion shares were traded on Tuesday, higher than the last 20-session average of 6.3 billion shares. Advancers outnumbered decliners on the NYSE by a 1.64-to-1 ratio. On Nasdaq, a 2.01-to-1 ratio favored advancing issues.

What Boosted the Benchmarks?

Encouraging economic data, passage of the Tax Cuts and Jobs Act, lower interest rates and strong earnings boosted markets during 2017. For the year, the Dow, S&P 500 and Nasdaq climbed 25.2%, 19.5% and 28.2%, respectively, posting their best yearly increases since 2013. Additionally, key indexes started 2018 on an upbeat note on Tuesday as investors remained optimistic that this year will witness more gains for the markets.

Out of the 11 key S&P 500 sectors, eight have managed to rally northward. Sentiments were positive despite rising geopolitical concerns following tensions in Iran. Anti-government rallies in the major oil exporter and OPEC member and recent crude supply cuts by Russia and OPEC countries had a positive impact on oil prices. 

Bullish sentiment towards oil prices was reflected in both WTI and Brent crude prices during the day. Early on Tuesday, WTI crude price reached $60.74, its highest intraday settlement since June 2015. Moreover, Brent crude price settled at its intraday high of $67.29, its best since May 2015.

Increase in oil prices during the day had a positive impact on the Energy Select Sector SPDR (XLE), which advanced 1.6%, becoming the best performing sector of the S&P 500. Some of its key components, including Chevron Corporation CVX and Exxon Mobil Corporation XOM rose 1.9% and 1.7%, respectively. Both the energy giants possess a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Despite reaching their best intraday levels since 2015, both the key oil benchmarks closed lower on Tuesday after pipeline systems in the UK and Libya resumed operations. Additionally, with domestic crude production close to a 40-years high, oil prices took a beating.

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